BMO agrees to compensate clients almost $50 million

BMO agrees to compensate clients almost $50 million

As part of a no-contest settlement with the OSC over “excess” fees charged to some clients, the BMO has agreed to pay client compensation in the amount of $ 49,885,661, according to the Financial Post.

“This settlement follows allegations by OSC staff that there were inadequacies in the BMO registrants’ systems of controls and supervision, which resulted in certain clients paying… excess fees that were not detected or corrected in a timely manner,” the regulator said in a statement. “OSC staff do not allege, and have found no evidence of dishonest conduct… The BMO registrants have also implemented additional controls and supervision to prevent a re-occurrence of this matter.”

While the OSC said that bank representatives provided its staff with “prompt, detailed and candid cooperation” after reporting the situation, the settlement stipulates that Canada’s fourth-largest bank would pay a further $2,100,000 “to advance the OSC’s mandate of protecting investors,” along with $90,000 to go toward the regulator’s investigation costs.

BMO is the latest major bank to self-report an overcharging issue to regulators after an internal investigation. They are also the latest to seek a no-contest settlement, which allows self-reporters to resolve such cases without admitting wrongdoing. The BMO settlement states that the bank “neither admitted nor denied the accuracy of the facts and conclusions” of staff at the regulator.

No-contest settlements have been characterized as a “strong enforcement tool” by Jeff Kehoe, director of enforcement at the OSC, who added that it has resulted in nearly a quarter of a billion dollars in compensation being paid to investors over seven agreements.